Global Mail Ltd. v. U.S. Postal Service

• Decision Date: 23 April 1998
• Docket Number: No. 97-1146,97-1146
• Citation: 142 F.3d 208
• Parties: GLOBAL MAIL LIMITED, Plaintiff-Appellant, v. UNITED STATES POSTAL SERVICE, Defendant-Appellee. United Parcel Service, Incorporated; Air Courier Conference of America, Amici Curiae.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 208

142 F.3d 208

46 U.S.P.Q.2d 1602

GLOBAL MAIL LIMITED, Plaintiff-Appellant, v. UNITED STATES POSTAL SERVICE, Defendant-Appellee United Parcel Service, Incorporated; Air Courier Conference of America, Amici Curiae.

No. 97-1146.

United States Court of Appeals Fourth Circuit.

Argued July 14, 1997.

Decided April 23, 1998.

ARGUED: Edward Alan Pennington, Morgan & Finnegan, L.L.P., Washington, DC, for Appellant. John Crawford Hoyle, Appellate Staff, Civil Div., U.S. Dept. of Justice, Washington, DC, for Appellee. ON BRIEF: Frank W. Hunger, Asst. Atty. Gen., Helen F. Fahey, U.S. Atty., Barbara C. Biddle, Appellate Staff, Civil Div., U.S. Dept. of Justice, Washington, DC, for Appellee. Hill B. Wellford, Jr., Wood W. Lay, Hunton & Williams, Richmond, VA; John E. McKeever, Kaethe B. Schumacher, Schnader, Harrison, Segal & Lewis, Philadelphia, PA, for Amicus Curiae UPS. L. Peter Farkas, Michael H. Selter, Mary Boney Denison, Farkas & Manelli, P.L.L.C., Washington, DC, for Amicus Curiae Air Courier Conference.

Before MURNAGHAN, Circuit Judge, PHILLIPS, Senior Circuit Judge, and BRITT, Senior United States District Judge for the Eastern District of North Carolina, sitting by designation.

Vacated and remanded by published opinion. Senior Judge PHILLIPS wrote the opinion, in which Judge MURNAGHAN and Senior Judge BRITT joined.

OPINION

PHILLIPS, Senior Circuit Judge:

Global Mail Limited, a private courier service, brought this action alleging that the United States Postal Service (USPS) had violated the Lanham Act in advertising its international mailing service under the name "Global Priority Mail." The district court determined that USPS was immune from Lanham Act suits through its retained sovereign immunity, and dismissed the suit. We reverse.

I

Global Mail Limited (Global), an enterprise primarily engaged in the business of sending letters, packages and parcels to recipients in other countries, entered the international mailing service market in 1987. Since that time it has continuously used the names "Global" and "Global Mail," and a design including the name "Global Mail Ltd.," in connection with its services. Global has published these marks and registered the design mark in the United States Patent and Trademark Office on March 7, 1989. Headquartered in Vienna, Virginia, Global has approximately 170 employees and totaled $32 million in service volume in 1996. Until March 1996, the United States Postal Service (USPS) operated an international mailing service under the name "World Post" that served as a direct competitor to Global's services. That month, USPS changed the name of its international mailing service to "Global Priority Mail," and embarked on a widespread advertising campaign prominently featuring the new name.

Global filed a complaint in the Eastern District of Pennsylvania in June 1996, alleging violations of the Lanham Act ("Act"), 15 U.S.C. §§ 1051-1127 (1994). After the case was transferred to the Eastern District of Virginia, USPS moved to dismiss the complaint alleging sovereign immunity from suit under the Act. The district court granted the motion and issued a four-page memorandum opinion. Despite the alleged fact that USPS has filed for or registered 82 trademarks under the Lanham Act, and has filed at least six cancellation or opposition proceedings to prevent competitors from registering marks too similar to their own, the court found that a section of the Postal Reorganization Act, 39 U.S.C. § 409(c) (1994), limits USPS's tort liability to only those tort claims that are available under the Federal Tort Claims Act (FTCA), 28 U.S.C. §§ 2671-80 (1994). The court opined that because Lanham Act claims are tort claims, but federally created, they are not viable under the FTCA and that USPS therefore retains its sovereign immunity as to such claims. Said the court: "This result seems harsh, particularly in light of the Postal Service's own activity in seeking protection of its own trademarks. Harshness resulting from sovereign immunity, however, is not new, and the court cannot as a matter of equity override what it concludes to be a valid sovereign immunity defense." J.A. 218. The district court therefore dismissed Global's action, and this appeal followed.

II

Challenging the district court's dismissal of its claim, Global makes two related contentions: (1) that the Postal Reorganization Act (PRA) included within its broad waiver of USPS's sovereign immunity all tort claims, and not just those cognizable under the FTCA; and (2) that USPS is a "person" capable of being sued under the Lanham Act. Reviewing de novo the district court's dismissal of the complaint for lack of subject matter jurisdiction, see White v. United States, 53 F.3d 43, 45 (4th Cir.1995) (citing Ahmed v. United States, 30 F.3d 514, 516 (4th Cir.1994)), we take these issues in turn.

A.

As a governmental entity, USPS is entitled to sovereign immunity unless Congress waives that immunity and authorizes consent to suit. Sovereign immunity deprives a court of jurisdiction to hear a case. See FDIC v. Meyer, 510 U.S. 471, 475, 114 S.Ct. 996, 1000, 127 L.Ed.2d 308 (1994); United States v. Mitchell, 463 U.S. 206, 212, 103 S.Ct. 2961, 2965, 77 L.Ed.2d 580 (1983). Congress has enacted a general waiver of USPS's sovereign immunity through the Postal Reorganization Act of 1970(PRA). Specifically, § 401(1) provides that USPS shall have the power "to sue and be sued in its official name," 39 U.S.C. § 401(1), and "to settle and compromise claims by or against it." 39 U.S.C. § 401(8). And, Section 409(c) of the PRA, under the title "Suits by and against the Postal Service," provides: "The provisions of chapter 171 and all other provisions of title 28 relating to tort claims shall apply to tort claims arising out of activities of the Postal Service." "Chapter 171" refers to the FTCA which was itself enacted to waive the federal government's sovereign immunity for certain tort suits.

Meanwhile, the FTCA includes the provision, "The authority of any federal agency to sue and be sued in its own name shall not be construed to authorize suits against such federal agency on claims which are cognizable under section 1346(b) of this title, and the remedies provided by this title in such cases shall be exclusive." 28 U.S.C. § 2679(a). This subsection was intended to "place torts of 'suable' agencies ... upon precisely the same footing as torts of 'nonsuable' agencies." H.R.Rep. No. 1287, 79th Cong., 1st sess., 6 (1945) (quoted in Loeffler v. Frank, 486 U.S. 549, 562, 108 S.Ct. 1965, 1973, 100 L.Ed.2d 549 (1988)). In other words, those agencies that have been given the general authority to sue and be sued, and therefore have lost their general sovereign immunity, remain subject to the terms of the FTCA for those claims cognizable under that Act. See FDIC v. Meyer, 510 U.S. 471, 476-79, 114 S.Ct. 996, 1000-02, 127 L.Ed.2d 308 (1994).

The question then is the intended interrelationship of these PRA and FTCA provisions in defining the scope of the USPS's sovereign immunity from Lanham Act claims.

Although § 401(1) of the PRA is a general waiver of USPS's sovereign immunity, see Franchise Tax Bd. of California v. USPS, 467 U.S. 512, 519, 104 S.Ct. 2549, 2553-54, 81 L.Ed.2d 446 (1984), it is axiomatic that waivers of sovereign immunity are not necessarily total. See Ruckelshaus v. Sierra Club, 463 U.S. 680, 685-86, 103 S.Ct. 3274, 3277-78, 77 L.Ed.2d 938 (1983). USPS contends that § 409(c) of the PRA, making "[t]he FTCA provisions relating to tort claims" applicable to tort claims "arising out of activities of the Postal Service," limits USPS's tort liability to only those torts cognizable under the FTCA. It is undisputed that the FTCA does not provide a waiver of sovereign immunity for torts created under federal law, but only for those torts cognizable under state law. As the Supreme Court recently noted, "to be actionable under [the FTCA], a claim must allege ... that the United States 'would be liable to the claimant' as 'a private person' 'in accordance with the law of the place where the act or omission occurred.' ... Indeed, we have consistently held that § 1346(b)'s reference to the 'law of the place' means law of the State--the source of substantive liability under the FTCA." Meyer, 510 U.S. at 477-78, 114 S.Ct. at 1001 (quoting 28 U.S.C. § 1346(a)).

The Lanham Act creates in essence a federal statutory tort, derived from the common law tort of unfair competition. See, e.g., Bauer Lamp Co., Inc. v. Shaffer, 941 F.2d 1165, 1170 (11th Cir.1991); Homeowners Group, Inc. v. Home Mktg. Specialists, Inc., 931 F.2d 1100, 1105 & n. 1 (6th Cir.1991); Toro Co. v. R. & R. Products Co., 787 F.2d 1208, 1214 (8th Cir.1986). And, because the FTCA does not provide a cause of action for federal torts, federal agencies typically cannot be sued under the FTCA for Lanham Act violations. See U.S. Gold & Silver Invs., Inc. v. United States ex rel. Director, U.S. Mint, 885 F.2d 620, 621 (9th Cir.1989) ("The sole basis for plaintiff's claim alleged in this complaint ... is violation of ... the Lanham Act. The FTCA is not intended to encompass such a claim."); see also Beneficial Consumer Discount Co. v. Poltonowicz, 47 F.3d 91, 97 n. 5 (3d Cir.1995) (noting that "a showing of a violation of federal law will not alone suffice to qualify a claim under the FTCA's waiver"); Goldstar (Panama) S.A. v. United States, 967 F.2d 965, 969 (4th Cir.1992) (same).

Global responds that § 409(c) does not limit § 401(1)'s broad waiver of immunity to only those torts cognizable under the FTCA. Each of the circuits to have considered the issue has concluded that § 409(c) serves as a substantive limit on the types of suits to which USPS must submit. In the context of an alleged "constitutional tort" under Bivens v. Six Unknown Fed. Narcotics Agents, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971), the Eleventh Circuit held simply, "Section 409(c) applies the [FTC...